David Ellerman

After Marx, dissenting economics almost always used 'the labour theory' as a theory of value. This paper develops a modern treatment of the alternative labour theory of property that is essentially the property theoretic application of the juridical principle of responsibility: impute legal responsibility in accordance with who was in fact responsible. To understand descriptively how assets and liabilities are appropriated in normal production, a 'fundamental myth' needs to be cleared away, and then the market mechanism of appropriation can be understood. On the normative side, neoclassical theory represents marginal productivity theory as showing that (a metaphorical version of) the imputation principle is satisfied ('people get what they produce') in competitive enterprises. Since that shows the moral commitment of neoclassical economics to the imputation principle, the labour theory of property is presented here as the actual non-metaphorical application of the imputation principle to property appropriation. The property-theoretic analysis at the firm level shows how the neoclassical (and much heterodox) analysis in terms of 'distributive shares' wholly misframed the basic questions. Finally, the paper shows how the imputation principle (modernised labour theory of property) is systematically violated in the present wage labour system of renting persons. The paper can be seen as taking up the recent challenge posed by Donald Katzner for a dialogue between neoclassical and heterodox microeconomics.

Saunders Mac Lane famously remarked that "Bourbaki just missed" formulating adjoints in a 1948 appendix (written no doubt by Pierre Samuel) to an early draft of Algebre--which then had to wait until Daniel Kan's 1958 paper on adjoint functors. But Mac Lane was using the orthodox treatment of adjoints that only contemplates the object-to-object morphisms within a category, i.e., homomorphisms. When Samuel's treatment is reconsidered in view of the treatment of adjoints using heteromorphisms or hets (object-to-object morphisms between objects in different categories), then he, in effect, isolated the concept of a left representation solving a universal mapping problem. When dualized to obtain the concept of a right representation, the two halves only need to be united to obtain an adjunction. Thus Samuel was only a now-simple dualization away for formulating adjoints in 1948. Apparently, Bodo Pareigis' 1970 text was the first and perhaps only text to give the heterodox "new characterization" (i.e., heteromorphic treatment) of adjoints. Orthodox category theory uses various relatively artificial devices to avoid formally recognizing hets--even though hets are routinely used by the working mathematician. Finally we consider a "philosophical" question as to whether the most important concept in category theory is the notion of an adjunction or the notion of a representation giving a universal mapping property (where adjunctions arise as the special case of a bi-representation of dual universal mapping problems).

Evolutionary economics often focuses on the comparison between economic competition and the process of natural selection to select the fitter members of a given population. But that neglects the other "half" of an evolutionary process, the mechanism for the generation of new possibilities that is key to dynamic efficiency. My topic is the process of parallel experimentation which I take to be a process of multiple experiments running concurrently with some form of common goal, with some semi-isolation between the experiments, with benchmarking comparisons made between the experiments, and with the "migration" of discoveries between experiments wherever possible to ratchet up the performance of the group. The thesis is that parallel experimentation is a fundamental dynamic efficiency scheme to enhance and accelerate variation, innovation, and learning in contexts of genuine uncertainty or known ignorance. Within evolutionary biology, this type of parallel experimentation scheme was developed in Sewall Wright's shifting balance theory of evolution. It addressed the rather neglected topic of how a population on a low fitness peak might eventually be able to go "downhill" against selective pressures, traverse a valley of low fitness, and then ascend a higher fitness peak. The theme of parallel experimentation is used to recast and pull together dynamic and pluralistic theories in economics, political theory, philosophy of science, and social learning.

Two aspects of the fine Flecha-Cruz paper can be usefully elaborated. The Mondragon cooperatives differ not only from capitalist firms but also from most other cooperatives in the doctrine of the 'priority of labor over capital' which means that the people working in any sort of cooperative will be members and will not be rented as employees. Also the Mondragon system of internal capital accounts solves the equity-structure problem that has plagued many modern cooperatives structured as non-profits or traditional worker cooperatives with 'membership shares'.

From a pre-publication review by the late Austrian economist, Don Lavoie, of George Mason University: "The book's radical re-interpretation of property and contract is, I think, among the most powerful critiques of mainstream economics ever developed. It undermines the neoclassical way of thinking about property by articulating a theory of inalienable rights, and constructs out of this perspective a "labor theory of property" which is as different from Marx's labor theory of value as it is from neoclassicism. It traces roots of such ideas in some fascinating and largely forgotten strands of the history of economics. It draws attention to the question of "responsibility" which neoclassicism has utterly lost sight of. It is startlingly fresh in its overall approach, and unusually well written in its presentation. ... It constitutes a better case for its economic democracy viewpoint than anything else in the literature."

This paper presents an argument for the democratic (or 'labor-managed') firm based on ordinary jurisprudence. The standard principle of responsibility in jurisprudence ('Assign legal responsibility in accordance with de facto responsibility') implies that the people working in a firm should legally appropriate the assets and liabilities produced in the firm (the positive and negative fruits of their labor). This appropriation is normally violated due to the employment or self-rental contract. However, we present an inalienable rights argument that descends from the Reformation and Enlightenment which argues that the self-rental contract, like the self-sale or voluntary slavery contract, is inherently invalid. The key intuition of the inalienable rights theory is that one cannot in fact voluntarily transfer de facto responsibility for one's actions to another person. One can only voluntarily co-operate with another person, but then one is de facto jointly responsible for the results. Just as the legal authorities legally reconstruct the criminous employer and employee as a partnership with shared responsibility, so justice demands that every firm be legally reconstructed as a partnership of all who work (working employers and employees) in the enterprise, i.e., as a democratic firm.

A theory of property needs to give an account of the whole life-cycle of a property right: how it is initiated, transferred, and terminated. Economics has focused on the transfers in the market and has almost completely neglected the question of the initiation and termination of property in normal production and consumption (not in some original state or in the transition from common to private property). The institutional mechanism for the normal initiation and termination of property is an invisible-hand function of the market, the market mechanism of appropriation. Does this mechanism satisfy an appropriate normative principle? The standard normative juridical principle is to assign or impute legal responsibility according to de facto responsibility. It is given a historical tag of being "Lockean" but the basis is contemporary jurisprudence, not historical exegesis. Then the fundamental theorem of the property mechanism is proven which shows that if "Hume's conditions" (no transfers without consent and all contracts fulfilled) are satisfied, then the market automatically satisfies the Lockean responsibility principle, i.e., "Hume implies Locke." As a major application, the results in their contrapositive form, "Not Locke implies Not Hume," are applied to a market economy based on the employment contract. It is shown the production based on the employment contract violates the Lockean principle (all who work in an employment enterprise are de facto responsible for the positive and negative results) and thus Hume's conditions must also be violated in the marketplace (de facto responsible human action cannot be transferred from one person to another—as is readily recognized when and employer and employee together commit a crime).